RBA research analyses factors driving US credit crunch
The Reserve Bank of Australia today published a working paper studying the main factors that led to a 'credit crunch' in the US mortgage market in the run-up to the global financial crisis.
Gianni La Cava, author of the paper, Liquidity Shocks and the US Housing Credit Crisis of 2007–2008, expresses surprise that there has been "little formal testing" of the causes of the credit crunch. Using almost 300 million annual data points on US mortgages spanning 2000–10, La Cava finds that lenders with
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